Councils want to offer mortgages

! This post hasn't been updated in over a year. A lot can change in a year including my opinion and the amount of naughty words I use. There's a good chance that there's something in what's written below that someone will find objectionable. That's fine, if I tried to please everybody all of the time then I'd be a Lib Dem (remember them?) and I'm certainly not one of those. The point is, I'm not the kind of person to try and alter history in case I said something in the past that someone can use against me in the future but just remember that the person I was then isn't the person I am now nor the person I'll be in a year's time.

Some local authorities want to be able to offer mortgages to people who can’t afford to buy houses.

On the face of it, this isn’t such a bad idea. House prices are far too high and if it was directed at the right people – young people who are priced out of their rural home towns, turning them into virtual holiday camps – then it certainly has its merits.

But – and this is a big but – it’s funded by the taxpayer and to be quite frank, we just don’t have the kind of money spare that would be needed to make this work. Which is presumably why they’re only asking for a fund of £2bn, barely enough to pay for 13 small 2 bedroom houses. It’s not clear whether that’s £2bn for each local authority or £2bn between them. Either way, it barely touches the sides.

14 comments

I thought it was lending money to people to buy homes they could not afford (sub prime mortgages)which has lead to the breakdown of the financial institutions, and the stagnation of the West’s economies.

It’s in the interests of the population in general to ensure that the countryside doesn’t become a glorified Butlins. I couldn’t afford to buy a house in the town I grew up in because it’s a nice rural location and according to our local paper the other night, the second most expensive place to buy houses in Shropshire. I know a lot of other people that I grew up with will have had the same problem as me and the young people looking to move out of the family home and get their own place now will be in the same boat. The kind of people who can afford to buy houses in the sticks are “city folk” buying a second home and retirees. Even the affordable housing there is in excess of £150k. If there was some spare cash kicking around that could be used to help people who grew up in the countryside to stay there then I’d be happy to see it used in that way.

I’m a young person who does not want to buy a house. Why should I fund other people to buy a house?

You could use that argument for anything. Why should someone without kids fund the education system? Why should someone who’s healthy fund the NHS? Why should a pacifist fund the military? Why should a criminal fund the police?

On the political compass I’m bang on the centre line between left and right so I guess I’m a bit of a political schizophrenic. I have authoritarian and libertarian leanings. I have socialist and conservative leanings. I think the welfare state needs to be pruned with a big fuck off pair of shears but I also think the state should provide for people who genuinely need help. I think we should have a free market with open competition but I also think the state should be able to provide all basic services (utilities, engineering, etc.) for itself. Similarly, while I think that if you want to buy a house you should get the money yourself and buy one, if the money you’re getting is a mortgage from a fund that’s financed by the taxpayer then that’s just the state providing a service that a private company also provides. As long as the state isn’t actively depriving mortage companies of business then I don’t see an issue. If the people who need a social mortgage don’t get the mortgage they’ll need a council house anyway and at least the council won’t have to pay for the upkeep of a private house and they’ll earn interest on the mortgage.

I think we need more council houses. Since they have been sold, they have become real shit holes, tyhe only people who live in them seem to be those who are too stupid to earn enough to buy them, those with peculiar political beleifs that stop them buying them, the pond scum of society and those who have not moved out, yet. If council houses were more common, they would have a broader range of poulation and not be so bad.

Also, the flood of new properties would take the heat out of the housing market too

Rob – you wouldn’t be. Mortgages get paid back with interest, OR the council will be able to repossess a house to give to people who can’t afford to buy. Either way, you as a non-buying tax payer wouldn’t lose out.

But they absolutely have to be careful on who they lend to. Any toxic loans will help the council housing stock but kill the budgets.

I also think they should not be allowed to buy them, they should stay as council houses, that is good for the community as a whole and we need a bed rock of concil housing as a fouindation to a boring stable society

As scaffold points out, I got my maths wrong. £2m would buy 13 houses, £2bn would buy 13,000 houses. Small, 2 bedrooms houses, that is and at least 80 miles from London. Factor in London prices and a mixture of house sizes and how many houses? Eight or nine thousand, perhaps? Any scheme is going to be run by a private company, it’s not something a local authority would run for themselves so a fair chunk is going to go to the management company to run the thing. It’ll no doubt be taxed as well so that’s a bit more to come off.